Smith and Baker Legal Services employs 4 full-time attorneys and 8 paraprofessionals. Budgeted salaries are $100,000 for each attorney and $50,000 for each paraprofessional. Budgeted indirect costs (e.g., rent, secretarial support, copying, etc.) are $320,000. The company traces the cost of attorney and paraprofessional time to each client and uses the total to assign indirect costs. What amount of indirect cost would be assigned if services to a client required $32,000 of attorney cost and $27,000 of paraprofessional cost?

Smith and Baker Legal Services employs 4 full-time attorneys and 8 paraprofessionals. Budgeted salaries are $100,000 for each attorney and $50,000 for each paraprofessional. Budgeted indirect costs (e.g., rent, secretarial support, copying, etc.) are $320,000. The company traces the cost of attorney and paraprofessional time to each client and uses the total to assign indirect costs. What amount of indirect cost would be assigned if services to a client required $32,000 of attorney cost and $27,000 of paraprofessional cost?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter17: Activity Resource Usage Model And Tactical Decision Making

Section: Chapter Questions

Problem 6E: Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of...

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